Covid-19

Romesh Vaitilingam, 31 March 2020

With severe lockdowns in place across much of the world to counter the spread of the coronavirus, the IGM Forum at Chicago Booth invited its panel of leading US economists to express their views on interactions between containment measures and economic activity, and the need for public investment to support the medical response to the health emergency. This column reveals a strong consensus among the experts that abandoning lockdowns prematurely will cause greater economic damage in the longer term. There is also unanimity on the need for more US government spending on expanding treatment capacity: building temporary hospitals, accelerating testing, making more masks and ventilators, and providing financial incentives for the production of a successful vaccine.

Eduardo Levy Yeyati, 31 March 2020

Dollar shortages and the real consequences of the COVID pandemic may lead to the next wave of emerging market debt crises. This column argues that Fed swaps mitigate this shortage only for a few selected countries, and traditional international financial institutions’ products are ill-designed to assist an emerging market facing a sudden stop. As a broker between central banks and emerging economies, the IMF has a unique opportunity to complete the international financial architecture and fill the lender of last resort role that has long eluded it.

Beatrice Weder di Mauro, Charles Wyplosz, 30 March 2020

Since the onset of the Covid outbreak, the economics profession has been extraordinarily reactive on traditional and social media. This column introduces “Covid Economics, Vetted and Real-Time Papers”, a new review from CEPR which will bring together more formal investigations, based on explicit theory and/or empirical evidence, to improve knowledge.

David Miles, 30 March 2020

In response to the current economic crisis, central banks have embarked on operations to purchase huge quantities of government bonds. Accusations that these policies amount to ‘printing money’ or ‘helicopter drops’ are unfounded and misleading. This column argues that the asset purchase operations undertaken when interest rates are very low can help greatly in stabilising the economy. These actions allow governments to issue long-term bonds, incur low effective costs in the near horizon, and avoid volatile financial markets. 

Shigeru Fujita, Giuseppe Moscarini, Fabien Postel-Vinay, 30 March 2020

The COVID-19 pandemic represents an unprecedented shock to labour markets. This column argues that the policy response should balance two objectives: (1) facilitating prompt reallocation of employment to essential activities during the emergency, and (2) maintaining workers’ attachment to their previous employers, preserving the aggregate stock of firm-specific human capital, and avoiding persistent mismatch, which would propagate the temporary shock into a prolonged stagnation. The authors make concrete labour market policy proposals and compare them with measures currently being implemented on both sides of the Atlantic.

Other Recent Articles:

Events

CEPR Policy Research